Correlation Between 361 Degrees and Microsoft

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Can any of the company-specific risk be diversified away by investing in both 361 Degrees and Microsoft at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining 361 Degrees and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 361 Degrees International and Microsoft, you can compare the effects of market volatilities on 361 Degrees and Microsoft and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in 361 Degrees with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of 361 Degrees and Microsoft.

Diversification Opportunities for 361 Degrees and Microsoft

  Correlation Coefficient

Average diversification

The 3 months correlation between TSIOF and Microsoft is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding 361 Degrees International and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and 361 Degrees is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on 361 Degrees International are associated (or correlated) with Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of 361 Degrees i.e., 361 Degrees and Microsoft go up and down completely randomly.

Pair Corralation between 361 Degrees and Microsoft

Assuming the 90 days horizon 361 Degrees International is expected to generate 2.46 times more return on investment than Microsoft. However, 361 Degrees is 2.46 times more volatile than Microsoft. It trades about 0.08 of its potential returns per unit of risk. Microsoft is currently generating about 0.02 per unit of risk. If you would invest  13.00  in 361 Degrees International on September 8, 2022 and sell it today you would earn a total of  37.00  from holding 361 Degrees International or generate 284.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

361 Degrees International  vs.  Microsoft

 Performance (%) 
361 Degrees International 
TSIOF Performance
0 of 100
Over the last 90 days 361 Degrees International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 361 Degrees is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

TSIOF Price Channel

Microsoft Performance
0 of 100
Over the last 90 days Microsoft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Microsoft is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Microsoft Price Channel

361 Degrees and Microsoft Volatility Contrast

   Predicted Return Density   

Pair Trading with 361 Degrees and Microsoft

The main advantage of trading using opposite 361 Degrees and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 361 Degrees position performs unexpectedly, Microsoft can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Microsoft will offset losses from the drop in Microsoft's long position.
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The idea behind 361 Degrees International and Microsoft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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